Construction slump squeezes housing supply

I am City A.M's deputy editor, having joined the newsroom in late 2010 as an economics reporter.

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Julian Harris

THE UK construction industry continued to decline in the third quarter of the year and faces more difficult times ahead, according to two gloomy industry surveys released yesterday.

Construction output is expected to drop by 6.3 per cent this year and another 1.4 per cent throughout 2013, the Construction Products Association (CPA) said.

And the construction decline is set to worsen the UK’s housing shortage, with the CPA forecasting just 118,000 housing starts this year – “fewer than half the number needed to meet the number of new households being created,” it said.

Meanwhile a survey by the Federation of Master Builders (FMB) echoed the findings.

“An alarming 39 per cent of respondents reported a decline in private new house building workloads in the third quarter of the year, and 40 per cent predict a further decline in the last three months of this year,” it said.

FMB boss Brian Berry added: “There is little doubt that we are in the midst of a serious housing crisis with fewer than half the number of new homes being built to meet current demand.

Berry urged the coalition to avoid “any new burdens” on the industry. “Instead, real progress is required on deregulation,” he said.